Welcome to the third and final panel of today’s hearings into the Government’s new industrial strategy. Kate Bell and Jordan Cummins, thank you very much indeed for joining us and for your patience with us this afternoon, as we have run a little late. Jordan, we are asking this question to all the panels: do you think that the growth target the Prime Minister has set for this Parliament is achievable?

Thanks for having us. That is a good question—it is like asking crystal-ball stuff. It probably is, but let me just caveat with why I hesitated. In our overall forecast period, we are expecting growth to hit around 1.6% this year, but 1.5% next year. Beneath that, lots of the debate gets stuck on the top line rate for GDP growth, but the figure we are more interested in on a day-to-day basis is the business investment rate. We think it is about 2.4% this year, but it could be 2.1% next year. I heard you talking to Clare Barclay about getting to G7 competitiveness levels, so 3%, 4% or 5% over the parliamentary term. That is going to be a big leap, and we should be honest about that. The only way to get to that top-line level of 3%, 4% or 5% is to get the underlying business investment rate higher and faster. Do I think it is achievable? Yes. Do I think the debate sometimes focuses too much on the top and not enough necessarily on the business investment level below? Also, yes. It is going to take a bit of a lift from Government and business; that is important to say. It is doable, but we probably have to go a little further and a little faster in the first two years of this Government to make it possible by years 3 and 4, before they move into the election period.

Thanks for having us as well. I am going to agree with Jordan that it is doable but ambitious. The key factor for us is not just whether we get that growth, but whether it results in an increase in living standards. It is really important to remember that that is part of the growth mission. It says that it intends to achieve an increase in living standards. I hope that when we judge the success of this strategy and the Government’s growth mission, we pay as much attention to that as we do to that headline growth figure.

The metrics the Prime Minister has used have been achieved by every Government since 1955. Do you have your own views at the TUC about what the correct metrics should be, in terms of raising living standards over this Parliament?

We would look at jobs first. We have thought about the metrics in relation to the assessment of the industrial strategy, and an increase in quality jobs is very much a part of that, particularly in the sectors we are talking about. There are a number of measures of living standards, and this is not the right place for a discussion about whether it should be real household disposable income or one of the other measures that the ONS produces. But we do want to see them rising, and we should be ambitious about that and as ambitious about living standards as we are about the growth target itself.

At some point, we presumably should set out a view about what those goals ought to be and how we judge success?

That is right. We are thinking about that hard when it comes to the context of the industrial strategy and what those metrics are. Of course, that is not the Government’s whole growth strategy, so we have not thought of the living standards target as a direct consequence of that. We have thought of the intermediate part, and Jordan talked about the input of business investment. We are talking about one of the outputs, but also a driver of that growth, which is an increase in good-quality jobs.

The Government has announced a whole raft of reforms to help drive growth. Which do you think are actually going to accelerate growth and which do you think might hold back growth?

We are very positive about increasing the investment rate. Jordan talked about the importance of public and private investment, and the greater enabling of borrow to invest that was announced at the Budget is highly positive in that regard. We see the reforms to Make Work Pay as a critical part of the Government’s growth strategy. We have had a low-skill, low-investment-in-people, low-productivity growth model for the last decade or potentially longer. Driving up the quality of work is a critical part of the Government’s growth strategy and of achieving that target on living standards. We have seen good signs on investment in skills. We are getting the establishment of Skills England. That is an area where we really need to go further. We know that there is attention being paid to the energy framework within the UK. We think we need a greater focus on industrial energy costs; there is an area of consensus on that across unions and business. Tackling the issues that are coming up time and time again, particularly when we talk to the foundation industries that will be important for the industrial strategy sector, is a real priority for us. The Government have not announced that as a barrier, but it is something where we are going to need some action from Government quite soon.

Biting off things like planning reform early in a Parliament is brave. Government deserves credit for that. This is really multifaceted; it spans local, parish councils and central Whitehall. Knowing that this will take a long time to get better, it was a good move to do it early, because it could take the Chancellor and the Deputy Prime Minister some time to get it through. Linked to that, you cannot do big aviation capacity, rail networks and road investments unless you tackle some of the knottier planning things early doors. If the Government had jumped straight into this project and it had been greenlit without doing some of the underlying work on planning, you would probably have organisations like the CBI saying, “That’s cart before the horse stuff.” So that is probably quite smart. On Skills England, as Kate says, we would love to see a little more on the direction of travel in terms of how it locks to the industrial strategy. If we are planning the economy we want be, and we are building the bridge to get there, which is what this work should be doing, the investment in skills, the reforming of the levy and the decisions on where we go in the future on carving out new graduate or apprenticeship schemes should be tied to sectors where we know we are going to need a big slug of capacity. If Skills England is biting that off, that is fantastic for us to see. That is not clear yet, but the establishment of the unit is a good start. Finally, the international picture is really important now. After the Budget, lots of businesses are looking at where growth comes from. As Clare was saying before this panel, as we work through the industrial strategy and they set up the structures, we should not take our eye off the fact that trade deals, trading relationships and other sources of growth that are important for our industrial strategy have been talked about, importantly, by the Prime Minister and the Foreign Secretary, and there is an EU reset and rumours of ministerial visits to India. Those are good things too, and they are all a good mixture of policy and symbolism.

Ms Bell, since the election we have seen a whole raft of announcements: the Stellantis closure at Luton; then, most recently, the AstraZeneca decision in Liverpool; and then some difficulties that Harland and Wolff has been experiencing over in Belfast. Do you see that as indicative of a wider malaise in the UK economy, or do you think these are just one-offs?

We see it as a consequence of the lack of planning and the lack of an industrial strategy that were delivered over the last decade. There are different issues in each of those sectors, and it is important to say that it is very, very difficult for the workers involved in them all. However, when it comes to Stellantis, for example, we know that that company has chosen to invest in a model that is taking higher profits, and it is closing what is actually still a functional plant, which could be delivering electric vehicles. We know that some issues at Harland and Wolff have been raised for a long time. Antonia mentioned Grangemouth earlier; again, there is a lack of long-term planning. Now, the industrial strategy cannot fix all those problems looking backwards, but it is important to say that some success of the industrial strategy is going to be judged on whether it gives Government the space and powers to intervene in these sectors, when decisions may have been taken previously, and whether it gives us a framework to plan where we can see these problems coming down the line. Unions will have seen these issues coming and have an approach that actually works. One of the things we are pushing for as an output of the industrial strategy is that every growth sector has a jobs and skills plan that looks to the future challenges. As Jordan was talking about, it must assess the skills needs and think about how, when there are transitions and bumps in the investment road, the sector as a whole, with Government supporting it, can make sure either that those workers get their jobs saved or that there is a long-term plan to transition them into new, growing sectors on equivalent terms and conditions.

Mr Cummins, when you are talking to businesses and investors, what feedback do you get on the UK’s relative strengths and weaknesses in terms of investing here, but also scaling up?

I am glad you split those out, because I think they are two different parts. There is investment, and then once the money is here, scaling is a different challenge. If you speak to big global investors in our industrial base, they will say that the things that have always attracted them to the UK—stability of regulation, gold-standard corporate governance, the rule of law, the time zone, which everyone knows are good barometers of whether you would put money here—are still really important. We should not take them for granted.

You do not think they have been damaged?

Well, there are some areas, such as regulation, which we should come back to, where the cost of compliance is particularly high. Where investors have obviously been over-indexing on interest is the stability point. If you think about the UK Government over the last few years, investors really need to know that, broadly, the Cabinet is still going to be the Cabinet in two or three years, and that the strategy that comes out in June from Clare and the team is still going to be the strategy in two or three years. Do not take that level of foresight for granted. Those boring building blocks are very important to investors. There is also the people side, and Kate’s points are really bang on there. People need to know that if they are going to put £5 billion, £10 billion or £20 billion into the UK, they will have the people, or at least the capability, to sustain that investment over five, 10 or 15 years, because that is their cycle; they are not tied to parliamentary terms. So the skills plans, and making sure they have the pool of available talent, are usually a really big consideration. When it comes to scaling, that moves you into, how do I expand in the UK? What are the incentives around capex investments? What are the Government helping me to do to make myself multi-site? If I invest in the UK, does the Government have a good enough relationship for outflow if I then want to export something further on? All these things start coming into play. Obviously, the scaling point is different if you are already in the UK and you are trying to get bigger, which is more of a financial consideration. But if you are looking at inward investors looking to move around or grow, they will want to couple the stability with a good sense that the UK has that plan for how big its economy wants to get and how much it wants to change. That way, they would know whether they could diversify in five or 10 years’ time, so they are not just investing in one thing that then goes out of favour in two parliamentary terms, and they have to pull out again.

Correct me if I am wrong, but we have a huge sector, in terms of our financing base with venture capitalists, private equity and so on. Why is there such a gap in this country?

Yes, that is the million-business question, I guess.

We have been around the country, talking to businesses in different parts, and they just say, “No one’s interested in talking to us.”

Kate might have a view too. Some is probably commercial risk appetite, let us be honest. That goes in cycles. Lots of businesses tell us that it feels quite tight to get commercial financing at the minute, just due to the general risk appetite across the lenders. However, we have fantastic things like the British Business Bank that we have backed and we support, and the CBI has done a lot of work with it over the years. The visibility just remains quite low in our conversations with business. They are not sure that it can help or that it can help at the right time, or they are not sure how to get to it. We do not want public pounds to be unspent if they are there to help businesses grow, but usually the visibility does not help to get businesses into those institutions that actually will help them. The Office for Investment is another example. It is good that we are looking to bolster that through the industrial strategy. Kate, do you have any thoughts?

I am not an expert in company financing, but there is an interesting relationship between the desire for investment, businesses’ willingness to invest their own money and corporate governance. Our view of the corporate governance regime is that, although it has very high standards, it is very short-termist in the UK. Our corporate governance system basically encourages the payment of dividends, so short-term horizons over investment. A stat here from my colleague says that, in 1987, business investment was around four times higher than dividends; now, they are at around parity. We have had that shift to a much shorter-term horizon from businesses in terms of their decision making. There may be a cyclical relationship between that and the willingness of financial institutions to invest in those businesses for growth over the long term.

We have always had a culture of short-termism in this country, versus Japan or Germany. Are you saying it has got even worse?

Yes.

There are three key areas where we are hearing from our members, and they are there in the Green Paper, but they need to be brought out more. One is that importance of jobs. It is great that we have these sectors, but what is that going to mean for my members on the ground? How quickly will these plans result in jobs? The Government have said this is a priority growth sector, but where are the apprenticeships? Where are the jobs? Where are the skills plans for people who work in that sector and people who want to work in that sector in the future? So that tangible connection to jobs, with good-quality jobs as an output of it, is a key piece of feedback. The second one, which I think I have mentioned, is industrial energy costs, which keep coming up as a major barrier. That is very related to plans for our foundation industries. Certainly, what our members who represent those industries would say is, “It’s great that we’ve got these growth sectors, but we cannot deliver those growth sectors without plans for steel, basic chemicals, engineering construction, ceramics, cement, freight and shipping.” We need a really clear plan for those foundation industries, and that has to be seen as critical to actually delivering the industrial strategy’s goals.

To continue the rule of three, I would say, first, that the doubling-down on high-growth sectors—where you think you will get 5% or 10% growth over the parliamentary term—is really important. That is a signal that we are taking this seriously and we know how to prioritise. It is really important that the Government does that. At the same time, understanding those enabling things that unlock greater productivity gains is also very good. Most businesses you talk to will say, “Yes, I need public policy help over here, but the things that are a real drag on my productivity are these few things, and, actually, if Government could work on those”—sometimes they are not as attractive and they have been in the ether for a long time—“that would actually help me immeasurably.”

Like what?

Usually skills. It would usually be, “All my levy fund is tied up,” or, “I have too many regulations to comply with and I have to hire 50 people to do it.” It is those types of things. Sometimes the slickness of the system in Government comes into it too—usually HMRC and processes around that. Those things are not always as attractive, but they need to be done for productivity gains. I should also go into workforce health, because that is a really important thing around inactivity. On the third one—to Kate’s point around foundational sectors—if you are a business looking at an industrial strategy, and you are hoping that it is going to build that bridge for you into the economy that we want to be, you have to be really honest about the fact that there are lots of underpinning things we need to have some action on; critical minerals is one, and transport, logistics and infrastructure investment are some others. While they will not get the headline life sciences, financial services-type market-making press, these things will usually unlock a greater deal of productivity across the everyday economy, which is absolutely critical. Those three things are probably the things that people are most happy to see.

In the Green Paper, the Government said they would like to widely engage with all stakeholders, including businesses and unions. How do you feel that is going at the moment? I will start with Jordan, if that is okay, and then go with Kate.

It is going pretty well. I will split it into outreach versus us trying to get information from Government. I would say that the outreach from the Department for Business and the Treasury has been pretty good. Definitely in the run-up to the spending review, there was lots of inbound on, how does business feel about this? Where can we go further on this? On the areas where Government rightly have to be a bit more guarded around the setting up of institutions, like the industrial strategy council, you understand that you could go periods of time without learning what is going on, because there is a statutory process, and they have to get terms of reference. On specifics, we have probably had less information, but not because we think they are holding something back; it is probably just because they are working on it. The outreach from the Department for Business has actually been fantastic, from ministerial to perm sec, all the way down. Broadly, if diaries allow, they will turn up and listen to industry say, “We want this. We don’t want that.” I would say it has gone pretty well so far. In fact, Clare and I sat down with the other business organisations yesterday afternoon, and that was a very good and productive meeting. We covered pretty much the whole of the economy, between us, the chamber, Make and everyone else. If I was grading it, I would say it is at a strong B-plus at the moment.

I am not going to give it a grade. We are pleased that there is union representation on the industrial strategy council. I am representing the TUC, and we also have Roy Rickhuss from Community. That was important. We are very keen to see union representation on the sector bodies and councils that will accompany the growth sectors. I was here when Charlie Mayfield was talking about the importance of those sectoral institutions having both union and business representation. Across the Government institutions, there is still a bit of a way to go to remember that unions are equal stakeholders to businesses. That is just a change in a way of working, and it is taking a while to feed through. The third thing I would say is that the Government has a lot of plans at the moment, and that is great. There is obviously a consultation on the Green Paper, there is the establishment of Skills England, there is a clean energy plan and there is an infrastructure strategy. Sometimes it could be clearer to external stakeholders where these fit together and where the best place to influence actually is. Are all these decisions going to be taken in the spending review? Should we all be talking to the Treasury? So it is about where the points of influence are, and where the plans are intended to fit together. There are normally fewer of us who are able to represent the voices of workers than there may be of the people making those plans.

Just going back to you, Jordan, you give a B-plus to the Government. Are there any areas of difficulty or any barriers that you or your members would like to see broken down when it comes to communication?

There is one main one. It is the understanding that there are multifaceted costs that are consistently going up in terms of the cost of doing business. That is not for any single reason, but energy cost is obviously one. I have spoken about regulation; there are some industries where this is a perpetually growing bill. The cost of employment is also going up. Maybe we can do the rounds on Make Work Pay, but the cost of employment is going up consistently. We do not need a big ideological debate about whether that is a good or bad thing; we just need an open forum for the understanding that, from now, any strategy, including the spending review and the industrial strategy, needs to major on the fact that there are parts of the economy that are really struggling. It is easy for us to do outreach on high-grade sectors, the structure of the industrial strategy and some of the public policy documents. However, when it comes to business-to-Government communication, there could be a bit more cross-departmental, perhaps leading with a briefing saying, “We understand that there are some areas that are quite tough for you at the moment, and everything we say from now on is supposed to alleviate that rather than make it worse.” That would be a comms addition that would be fantastic to hear.

What do you think is the right level of Government investment, through the spending review, in the industrial strategy? We heard earlier that, under the Theresa May Government, the figure was £42 billion over five years. What are your thoughts, Mr Cummins?

The funny thing is that, in my time doing this, spending reviews have not always been the natural territory for us to talk to Government about growth measures. A lot of the time, it is about envelope spending and things getting through the system. The Government have been quite clear that this is going to be a different type of spending review in that sense, and they want to treat it very much like an economic stimulus-type package, as well as envelope management. In terms of actual figures, we have not done the modelling of what is a good amount of money. The Government have said they want to unlock around £100 billion of investment, which is a big number. That would be a number that I am sure we would get behind and businesses would like to see. But public investment in the UK is about 3% of GDP, and we could probably have a debate about whether it should be 4% or 5%, as a catalytic investment to get that private investment to come in behind it. In the EU it is about 1%, for example, and they are really waking up to the fact that, as a bloc, they need to do more public investment to inspire that private investment. When we think about the numbers, we are interested in the figure, but we are more interested in the pound that the state puts in versus the pound that the private sector can then unlock. We are more interested in the intersection than the figure, but if the Government put £100 billion on it, that sounds like a pretty good, big number from our perspective.

What sort of ratio would you think is right, though? You are saying it is relative. We heard Professor Mazzucato talking about catalysing the private sector. What do you think the ratio should be? Would it be 10%? Or 20%?

I would definitely give a view that my economists would shout at me for, but if it is less than double, then it is probably not a good use of money. For every pound the state spends, the private sector should be able to crowd in at least double that amount. To start with the Chair’s question, if we are going to make 3%, 4% or 5%, there are only so many fiscal events we have in that time. So there is only so much envelope we can deploy, for the private sector to then spend a year or so working out whether it can then row in behind that pound and pence. It probably should be that, for every pound you spend, the private sector can unlock a couple.

I am not going to give a total figure, but I can give you some areas where we have specifically asked for more money and that we are looking for that in the spending review. Those relate to rail infrastructure, an investment decision on Sizewell C, funding for the Nuclear Decommissioning Authority, and more funding for the warm home plans. You may see those as industrial strategy-adjacent, but they are critical to delivering the infrastructure that is going to be needed to deliver across the industrial strategy. Skills has to be a priority area for funding. You will know that the adult skills budget was cut by around 40% over the period of the last Government. We know that 80% of the 2030 workforce are currently in work, so uplifting that skills budget has to be a priority for expenditure. I would probably slightly echo what Jordan was saying, but in a different way. We have to think about what commitments we can require from the private sector when it comes to that spending. What are the conditionalities around investment in infrastructure when it comes to apprenticeships or the delivery of jobs? For example, we have a large number of tax credits supporting our growing creative industries. What do we expect for a return on that investment? We know we have a very good return on investment from that spend, but how might Government influence the future direction of growth and the outcome of that growth, in terms of good-quality jobs, when it makes those spending commitments? It is great to hear Jordan say that it should be double, but what does that crowding-in of investment actually deliver us in terms of good jobs and growth in the UK?

Let us come on to Charlie Maynard, because we need to develop this point. At the moment, you will know that the OBR projections are that the public investment that has been announced is actually not crowding in private investment; it is actually crowding it out. So there is a really important question for us about the design of fiscal interventions.

I am actually going to go back to my earlier question, if that is all right. You mentioned that sectors are really struggling, and a couple of weeks ago goods exports and manufacturing were down by, I think, 11% in the last eight years, or something like that, which is resulting in a lot of people losing their jobs. Talking economics here, and going back to trading partners in Europe, and to the single market and customs union—not just those two, but I would really like some straight answers as well on those two—do you think those things would help economic growth or not?

With 500 million people on your doorstep, if you can trade to them more effectively, more cheaply and with fewer barriers, that will of course boost growth. That is a factual statement to make. As a non-politician, I can make that statement, of course. However, there are lots of political challenges in doing that, and that is your job. But, absolutely, there is no doubt that our biggest potential trading partner is right next to us geographically, so ease of access would be hugely beneficial to British business.

Would you encourage a more ambitious reset when the Prime Minister meets President von der Leyen?

Business does want a bit of bravery; ambition is one word, but I think it wants a bit of bravery based on where we are. The Foreign Secretary says that the important thing about our foreign relations strategy is that we take the world we are in, as well as the one that we want. That is important context. Ambition today probably looks a lot different from ambition five, six or seven years ago. Beyond just whether we can sign an agreement, whether it is a customs or a non-customs union, and what is possible and not possible, is that there is a public commitment to some kind of timeframe for decisions. Business would want a reset approached in the way that it would approach a very knotty industrial problem: you sit down, you set a clear agenda, you define the parameters, you publish your progress on those parameters, you get through and you make a statement at the end of it. High ambition would be good from some sectors, but more than anything else, people want more transparency about what is in the art of the possible from the reset.

The Government has been clear that its trade strategy is part of its growth strategy, and that they need to be integrated. Obviously, the review of the trade and co-operation agreement is an opportunity to do that. I cannot rate the Government’s level of ambition right now.

That was not my question, Ms Bell; the question I asked Mr Cummins was, do you think our economy will grow faster if we are inside the single market and customs union, and moving much faster towards Europe even before that, or not?

I do not know what is on the table for the trade and co-operation agreement deal. Therefore, I think the question is, how can we get our economy to grow faster? We know there are trade frictions at the moment; that is something our manufacturing businesses have talked about, and it is something our creative industries have talked about, and that is clearly part of the growth sector.

You do not have to answer the question if you do not want to, and I take your point completely that there is politics—I get that—but if we were inside the single market and the customs union, would our economy grow faster or not?

I genuinely do not know

Let me just pick up this question about fiscal interventions. Some of the statistics that came out of the analysis of the Bidenomics programme suggested that perhaps $6 was being crowded in for every dollar of public investment. It is quite difficult to pin down the analytical truth to that. We obviously have the OBR forecast about private investment not necessarily being crowded in at the rate that we would like over the course of this Budget. Do you have a view about how you get the biggest bang for the buck when it comes to public investment, Mr Cummins? Do you put the money in as capital spending? Do you put it in as tax credits? What is your house view about the best design—the best mix of public spending?

If I am honest, I probably do not have a perfect house view. I think tax credits play quite an important role. Lots of our members would want to see more intervention in that space. However, what comes up more often than not, in a post-private finance initiative world, is what is the 2.0 model that people are latching on to for the big projects over this parliamentary term to start crowding in some money? For example, it could be assessing mutual investment funds, which have been quite successful in infrastructure investment in Wales. Where are the credentials of schemes that have popped up around the UK, or in other jurisdictions, that seem to be getting the money flowing in from the private sector faster? It is about that assessment, in terms of knowing the politics around PFI and knowing where we have been in the last 20 years, around what has gone right and what has gone wrong. We have to draw a line in the sand and work out what comes next for the UK.

If I gave you £1 billion to run your own industrial strategy, give us a sense of where you would spend the money.

It would probably be a mixture of big capital investment—probably something that unlocks big infrastructure, big jobs impetus.

What fraction of the £1 billion I have just generously given you would you spend on that?

Probably a big chunk. I would say probably at least a third, maybe half, on big symbolic projects that lead to job creation, create supply chains and make markets. I would probably want to spend a good amount of time on creating sandbox-type environments to create high-risk appetites, so we can push the appetite on that. We have done quite well in the past in some areas on that: look at financial services innovation in the last 10, 20 years. I would then spend a good chunk of that money on skills development. I would probably spend quite a lot of money in the people space, not just on bums on seats in companies, but more on capability-building in the transformation we need in some of the sectors that are struggling.

How much of this money would you devolve, and how much would you spend through the well-oiled machine that is Whitehall?

Good question. I probably cannot give you a percentage, but I would devolve a good chunk. That is fair to say.

Okay. What is a good chunk? Half? Two thirds? Ninety per cent?

I maybe cannot give the perfect amount of money.

What do you think, Kate?

The priorities that Jordan set out—I have already expressed them, and I think they are a shared set of priorities—are around infrastructure, skills and energy costs. It is really important to think about how you structure that funding and the conditionalities around it. To give a couple of examples, at Hinkley Point C there is a target of one apprenticeship for every eight trades workers on site. That is a clear example of a conditionality. Another example is from Canada, where you get a higher tax credit for clean energy projects if you have 10% of the labour done by apprenticeships. We are really interested in the structure of that funding and the strings attached. I do not want to give you a percentage for the devolution, because if you are building an infrastructure project, you are not going to devolve that funding. Jordan has just said we need quite a lot of that money in pieces of national infrastructure, which are going to benefit the whole country. There is a dilemma about skills funding. We are going to have local skills and growth plans, but we also need skills plans at a sectoral level. I cannot give you a percentage, but that is a question that needs a bit more thought, about where we are driving skills for sectors and transferable skills, and where we are driving skills for local areas. I do not have a percentage answer, but it is worth thinking about.

That leads us quite nicely into the discussion around what we think our institutions can be doing and what we mean when we talk about partnership. Kate, you said earlier that you did not feel like unions, for example, were necessarily on that even footing. What is it that Government expects from businesses and trade unions, and what should Government expect of that partnership between businesses and unions to get these things to move more effectively?

The industrial strategy council obviously does have union representation. There is a way to go before we are 100% clear about how exactly that is going to work, how its advice is going to be formalised, how Government responds to that advice, the precise remit in terms of what the council can and cannot make recommendations to Government on, and how Government responds to that. We have real learning from tripartite institutions that we have in the UK. The Low Pay Commission is probably our most successful institution. For over 20 years, it has been making a recommendation about the hardest thing in labour market policy, which is how much people are going to actually get paid, and doing so successfully. Some of that success has been about balanced representation. It also has independent representation, as well as a clear remit: Government asks it a question, and it makes a recommendation to Government on an annual basis. There is a lot we can learn from that. We need the tripartite approach, or even a bipartite approach, at a sectoral level as well. We know when that works; we have some sectoral architecture left in the UK. We have a Construction Industry Training Board, which has managed to invest some additional money into construction skills. We have a Retail Sector Council, whose members worked really closely together during the pandemic on safety measures for workers and stores. We need to look at that machinery, look at where it is working well and learn from that in the growth sectors.

Yes, I would agree. Some of the best examples usually come from covid. Furlough is a fantastic example of the CBI, the TUC and Government, standing outside No. 10 and making that work. However, the challenge is that this cannot just work under pressure. This has to feel like a partnership going forward, and the Low Pay Commission is a fantastic example. Usually what happens is that, to make this work, you need to roll the pitch a bit. If there are difficult decisions coming—whether it is legislation or in public policy—in order for us to have a clear enough mandate to engage in tripartism, we just need the time. Whether it is us or any other representative body, the foresight point I made earlier is really important. When we talk about the transformation of industries—of which there will be multiple; whether we want it or not, it will just happen—in lots of those conversations it is really important that the TUC, the CBI or any other organisation are doing things together. It is the sunlight that can emerge between conversations, and between rooms, that can sometimes slow you down. The more we can do those transformation discussions together, the better.

I am just going to jump in on that point. Is there a tension here, in that this growth strategy—it is almost like “The Hunger Games”—is picking certain sectors and reinforcing success. We heard earlier that we are looking at previous growth figures and picking the winners based on that. Of course, there is an element of trying to look into the future and guess what is coming down the tracks, but is there not an inherent tension here, because the CBI may say, “This industry is on the wane. It’s a sunset industry. It’s going”? That might not play too well with the TUC. I am thinking of oil and gas, for instance. There is a lot of tension around oil and gas at the moment, with something like 200,000 jobs directly involved in oil and gas across the UK. Yes, there is a transition coming—there is no doubt that we are in the foothills of that—but there is an argument about how quickly we are going there and how quickly we are getting those people into those new jobs. Is there a tension here about picking these winners at this stage?

To answer your question, yes, there will always be tensions, because these are inherently difficult discussions. Oil and gas is a fantastic example. Some of our biggest oil and gas companies are some of the biggest investors in green technology at exactly the same time. The challenge of running a G7 nation is that you have to hold these things at once. I would not imagine that Kate and I would agree on everything, but the important thing is we discuss it together. One of the challenges that we have if we do not make tripartism work is that we just get factions, and in individual sectors or individual firms like Grangemouth, people just think there is no co-ordination above them. That can be quite dangerous for trust in this model that we have. I agree with you that there will be tension sometimes, but that should not detract from our ability to have this conversation together, even if we do not agree.

I probably agree on that point. Around oil and gas, our policy is “No ban without a plan” and it is the lack of a plan that we are really talking about here. Those institutional frameworks are critical to getting those plans in place and to seeing the issues coming down the line. The issues around Grangemouth, for example, were incredibly evident to workers who actually work on that plant, and they have not had anywhere to go to say, “Okay, there are some financial difficulties. We can see waning demand. How are we transforming this site to do something different? What other jobs and skills and what investments are coming to this area?” It is that lack of a plan that has created the real tensions, because we do not get to talk about the issues until it is too late and workers’ jobs are on the line.

On the skills transition, honesty about what those skills look like when you put the word “green” in them is really important. There are some sectors where green skills still look a lot like the jobs that have to happen right now. That gets lost sometimes. There is sometimes an assumption that we can transition sectors that are transforming, and that there are perfectly crafted, future-focused jobs ready to go into, which a lot of the time just will not be the case in any economy anywhere. That honesty is really important.

Just very briefly, listening to Clare Barclay earlier, were you surprised at how much time is being devoted by the council to turning a supertanker around?

It did not sound like very much time to us.

I do not have a good metric for assessing what level of time should be taken at this stage.

The challenge we face is huge, is it not?

It is a big challenge, but the Government have started on it. They have a civil service, which is obviously working on the industrial strategy itself, and the role of the council is to advise on that strategy. There will obviously be a particularly intense period of work up until the point when that strategy is published. However, as Clare Barclay said—as everybody has said—the aim of that industrial strategy council is to be here for the long term, to have that oversight and to provide some certainty over a long period of time. That is the framework we should be looking at: what is sustainable over the long term, as well as what the council needs to do in this intense period before the White Paper is actually published.

Mr Cummins, were you pleased or surprised?

I was not massively surprised. These are difficult decisions to make. It takes time to put new institutions on a statutory footing. Think about what happened with the Climate Change Committee: this is a highly respected institution now that Government listens to and knows it has to listen to. That did not happen overnight. It is the same as business investment: if we are investing in the long term, you cannot do it in the first 100, 200 days; sometimes it is just not possible. That being said, as we get closer to the spending review, I am sure we will be pushing Clare and the team to go just a little faster.

You have talked a little about this as we have gone on, but what does success look like? I am keen to engage with that. The previous Government had three industrial strategies, so I would be keen to look at your view of what worked as part of that and what did not.

The biggest thing that will perhaps separate this industrial strategy from the last iteration will be that it is smaller and more usable, probably for more businesses. We are not trying to spread a Government pound to every part of the economy. As Kate said, this is not the entire growth plan. Businesses want this to be choiceful. They want it to prioritise where Government should spend its money. If we come away from this at the end of the parliamentary term, and people have a good sense of what the calling card for investment in the UK is and what you can expect us to spend money on here industrially, that is a pretty good outcome. If we come away from it and we have fewer skills gaps and more jobs available in the sectors that are growing, rather than ones that just necessarily exist in the economy, that is a good outcome. If people on the high street, importantly, can pick this up in June, the spring or whenever it comes out and say, “I get that I’m not growing at 10%, but I’m consistently growing at 2% or 3%, and have been for 40 years, so there is some degree of policy package here that is of benefit to me”—in terms of reducing some of the costs I was talking about earlier—that is a good KPI. Some of these might not be big, fancy things, but getting enough of the business community to pick this up and go, “I can see how it benefits me” has to be a benefit to that business investment rate, because that will give them the confidence then to spend money.

We would say that an increase in quality jobs in the growth sectors is the absolute key metric for us. More broadly, we need an understanding of how it fits into the Government’s wider growth sector. As Jordan said, what does the growth plan mean for a business on the high street, a business in hospitality and the people who work in them? We should be thinking about whether, in five years’ time, we will be facing situations like Grangemouth or Stellantis, or will we have managed to turn that round so that people in industries that are changing have certainty about jobs and about their future? That is why we care about this and that is what we should be thinking about too.

That was extremely thoughtful, intelligent and insightful. Thank you very much indeed for helping to get our industrial strategy inquiry off to a flying start. We very much hope that we can stay in touch with you over the course of this inquiry as we deepen our evidence base and draw up recommendations to Government. That concludes this panel and this session.